Former executive ordered to pay $300,000 for role in fraud
A former executive with Specialty Filaments Inc. in Middlebury was sentenced to a three-year term of federal probation Monday and ordered to pay $300,000 in restitution for his role in a $1 million bank fraud.
Jeff Audette, the vice president of the defunct company, faced up to five years in jail for conspiracy to commit bank fraud.
But after Audette agreed to assist federal prosecutors and pleaded guilty to the charge in February, Assistant U.S. Attorney Gregory Waples wrote in a sentencing memorandum that probation and restitution payments were appropriate punishment for Audette.
“During the course of this investigation and prosecution, Audette has provided genuine and substantial assistance,” Waples wrote. “Without Audette’s cooperation it would have been impossible for the government to charge, much less convict” Donald James Marler III, the defunct company’s former president and chief executive officer.
Specialty Filaments, which manufactured nylon and polyester filaments used as components in industrial and commercial brushes, declared bankruptcy and closed its doors in 2007. The company operated facilities in Middlebury and Burlington.
Federal prosecutors charged Audette, Marler and the company’s former director of finance Paul Mammorella, with orchestrating the fraud, which involved the use of falsified reports delivered to Wells Fargo.
In those reports, Waples said Audette and the other executives inflated the cash-strapped company’s accounts receivable and inventory so that the bank would loan the company more money.
Those actions cost Wells Fargo and the Vermont Economic Development Authority, which guaranteed a portion of the loan, more than $1 million when Specialty Filaments went bankrupt.
But despite those losses, Waples wrote that all three executives acted out of good intentions.
“This was not a crime of greed or self-enrichment. The reason why all these essentially good defendants did what they did was to keep SFI afloat until a buyer who could invigorate the company was found. Had that goal been realized, Wells Fargo would have been made whole,” Waples wrote.
Mammorella was sentenced last week to a three-year term of probation that included four months of home detention. He was also ordered to pay $300,000 in restitution and he was ordered to perform 100 hours of community service work.
Marler, who pleaded guilty to conspiring to commit bank fraud in August, is due to be sentenced on Dec. 17.
@rutlandherald.com.MORE IN Vermont News
- Most Popular
- Most Emailed
- MEDIA GALLERY